The first phase of Zahrat Al Waha for Trading Co.’s initial public offering (IPO) starts on Sunday and will run through August 20, with 900,000 shares on offer to retail investors at a price of SAR 51 per share which was determined through the book building process.
The IPO is the first to take place this year in Saudi Arabia and will offer 4.5 million shares, or 30 percent, of the company’s capital. Of the total issuance, 80 percent of shares is allocated to institutional investors and 20 percent to retail.
During the book building process, shares allocated for institutions and mutual funds were 1.2 times oversubscribed.
Last June, The Capital Market Authority (CMA) has approved the prospectus for Zahrat Al Waha for Trading Company’s initial public offering on the Saudi Stock Market, Argaam reported.
In 2003, Zahrat Al waha was established in Riyadh as an individual institution owned by Ahmed Al Theyab with SAR 25 million in capital.
In 2015 it was converted to a limited liability company with a total capital of SAR 50 million which was then changed to a closed joint stock company in 2016 with SAR 80 million in capital.
The company has raised its capital many times since inception to reach SAR 150 million.
Zahrat Al Waha is engaged in factory building and maintenance, manufacturing industries, building and construction, money services, information technology, gas and water, social responsibility, agriculture and fishing as well as mining and petrol. It currently has four branches.
In 2016, the company’s domestic market share of plastic water bottles reached 37.6 percent while market share of plastic bottle caps reached 21.8 percent.
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Company Profile |
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Stock market |
Saudi Stock Exchange (Tadawul) |
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Company’s core business |
Factory building and maintenance, manufacturing industries, building and construction, money services, information technology, gas and water, social responsibility, agriculture and fishing as well as mining and petrol. |
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Company’s status |
Active |
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Company’s capital |
SAR 150 mln |
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Products & Clients |
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Raw materials |
Uses polyethylene terephthalate (PET) and high intensity polyethylene (HIPE). SABIC is main supplier |
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Net profit |
Profits are seasonal, rises during summer and drops in winter |
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Major clients |
Nova Water and Hana Water which account for over 36% and 27% of company’s sales respectively |
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Production capacity |
Has 21 production line producing 7 billion pet polyforms in 15 different sizes per year and produces 6 billion plastic caps annually |
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Future plans |
It currently has no significant new products or activities |
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IPO Details |
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IPO Percentage |
30% |
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Number of retail investors IPO shares |
0.9 mln shares |
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Retail Investors IPO shares percentage |
20% of total IPO shares |
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Issuance price |
SAR 51 /share |
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Size of retail investors issue |
SAR 45.9 mln |
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Eligible subscribers |
Saudi citizens |
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IPO date |
August 13 to August 20, 2017 |
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IPO minimum |
10 shares |
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IPO maximum |
250,000 shares |
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Allocation |
August 27, 2017 |
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Surplus payment |
August 27, 2017 |
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Additional Information |
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Financial Advisor, lead manager and underwriter |
Banque Saudi Fransi |
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Receiving banks |
National Commercial Bank, Banque Saudi Fransi, SAMBA and Riyad Bank |
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Use of IPO proceeds |
Will be paid to selling shareholder after deduction SAR 17 million IPO fees. The company won’t receive any amount of IPO proceeds. |
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Major Shareholders |
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Owners |
Shares before IPO (mln) |
Stake % before IPO |
Shares after IPO (mln) |
Stake% after IPO |
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Ahmed Hamoud Al Theyab |
14.85 |
99% |
10.35 |
69% |
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Rakan Ahmed Hamoud Al Theyab |
0.15 |
1% |
0.15 |
1% |
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Public |
-- |
-- |
4.50 |
30% |
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Total |
15.00 |
100% |
15.00 |
100% |
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Recent IPOs in Saudi Market |
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Company |
Issuance price |
Number of shares issued to retail investors |
Coverage ratio (retail investors) |
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2016 |
|||
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L’Azurde |
37 |
3.87 |
293% |
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Yamamah Steel |
36 |
4.57 |
479% |
|
Saudi German Hospital |
64 |
8.28 |
274% |
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2015 |
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Alandalus Property |
18 |
8.40 |
469% |
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SGS |
50 |
22.60 |
339% |
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SACO |
70 |
2.88 |
620% |
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MEPCO |
30 |
6.00 |
473% |
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